Revenue has increased 6% YoY. Average revenue per User is down to $3.11 Q3 2022, from $3.49 Q3 2021.
Net loss is $360m Q3 2022, from $72m Q3 2021. $155m of that was due to restructuring.
Where does Snap go from here?
Imo, this is as much a problem of products being built with no regard for costs. Most tech companies have distinct development and product roles...so if this is going wrong, why even have the product people?
The core product for SNAP should be highly cash-generative, this is the case for most tech companies. But, instead, they are often losing massive amounts of money because there is no economic logic to what they are doing. Most of these companies are run by people who got rich somewhat accidentally, by showing massive disregard to economic logic and then having an even dafter VC manager shove money into their mouth.
The question is not where do they go, but whether the current managers have the stomach to get there.
They've built a great and popular product, be content with that and run it like a real business rather than an incubator of failed ideas
The problem for social media is that something new comes along, becomes popular, and displaces incumbents if they aren’t innovating, or at least adapting rapidly to innovation in the space. If you’re milking instead of moving, you’re going to wake up as MySpace.
Granted they just released "Spaces" which is pretty nice, but I think you'll find the pace of innovation at these companies is quite low relative to their size. I think companies like SNAP and TWTR are fundamentally mismanaged on the product side. Very low output relative to the headcount.
At the end of the day, some businesses are niche and limited in scale, and that's ok. Right now every larger tech company is run as if they're trying to become a huge conglomerate.
It is far better to milk your cash cow, and invest in acquisitions where possible (now, almost impossible legally...so the only component of the strategy should be: milk cash cow, return excess value to shareholders).
If you’ve already extracted (milked) a billion dollars or more from the business, why do you care if you wake up one morning and your business is the next MySpace? That’s the employee’s problem, not yours. Sell the business to someone who hasn’t yet realized it has turned into MySpace, and move on to the next idea you’ve got. Or retire. Whatever you want.
Look at the ads page, it's like talking to (I'll be be Blunt) the worst reality tv addicted morons around
Don't get me wrong I think you're probably right but snap's business model is not just a pure tech issue at scale, i.e. you need old fashioned sales
Snapchat requires semi persistence for stories (viewable for 24hr) and millions of users can view a single story. When a celebrity posts a story and 5mil users view it that requires more engineering effort that p2p what’s app messages. Additionally, serving ads requires a large amount of compute (ad ranking/serving), storage (impressions), offline processing (Hadoop clusters are hard), engineering, salepeople, economists, and auxiliary systems to support advertisers buying ads, etc.
As an example, check out snaps blog post on ML and ads https://eng.snap.com/en-US/machine-learning-snap-ad-ranking
Given the increased competition in the ad-tech space this will be even worse in the future.
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